Distribution channel of Samsung - Presented at XIMB
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Transcript of Distribution channel of Samsung - Presented at XIMB
CHANNEL MANAGEMENT
F8
SOBHAN
SOMAK
SOMNATH
SOMYA
SOUMYA
SOURAV
347
348
349
350
351
352
IN UNORGANIZED AND MODERN TRADE
F8F8
HISTORY
• Founded in 1938- Exporter of dried fish, vegetables and fruits- Flour mill and confectionary machines
• 1950’s economic stabilization- Korean War – Samsung lost all assets- Aimed to rebuild Korean economy; entered the manufacturing industry (sugar,
fabrics)- Became a leader in modern business practices (recruiting from outside)
• 1960’s expansion of key industries- Entered electronics and chemical industries- Established as Samsung Electronics Company in 1969
• USPs• Line Stop Mechanism where anyone can stop the manufacturing in progress to
check or correct defects.• High level of quality control; positioning of brand as a fast moving brand for young
and career oriented professionals.• High degree of performance and style communicated through brand ambassadors
David Beckham, Priyanka Chopra, Emily Pidgeon and James Magnussen.
F8F8
FPRODUCT MIX
LED TV
Plasma TV
UHD 4K TV
OLED TV
Semi Automatic
Top Load
Automatic
Front Load
Automatic
Counter Top
Over the Range
• French
Door
• Side By
Side
• Frost Free
• Bottom
Freezer
• Direct
Cool
• Split Air
Conditioner
• Floor Standing
Air
Conditioner
F8
STORES VISITED IN BHUBANESWARF
We also visited Country Kitchen, where we ripped poor Somnath off.
F8
DISTRIBUTION CHANNEL
Clearing and
Forwarding Agents
Distributors Retailers
Digital
plazas
Dealers
Multi -
Brand
Retailers
F8
F8
DISTRIBUTORS RETAILERS, DEALERS, MULTI BRAND RETAILERS
MARKETING COMMUNICATION MIX BY CHANNELS
COMPETITOR ANALYSISF8
LG21%
Samsung21%
Panasonic9%
Videocon14%
Sony22%
Other13%
Flat Panel TV-Market Shares
LG23%
Samsung20%
Panasonic20%
Videocon16%
Sony18%
Other3%
Refrigerators-Market Shares
LG31%
Samsung19%
Panasonic13%
Videocon12%
Sony25%
Washing Machines-Market Shares
LG29%
Samsung27%
Panasonic16%
Videocon11%
Sony17%
Microwaves-Market Shares
Market shares at the national level.
COMPETITOR ANALYSISF8
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
LG Samsung Panasonic LG Samsung Panasonic
20 litres 28 litres
Price Comparison of Microwaves
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5000
10000
15000
20000
25000
30000
35000
40000
LG Samsung Panasonic LG Samsung Panasonic
26 inches 32 inches
Price Comparision of LCD TV's
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5000
10000
15000
20000
25000
30000
LG Samsung Whirlpool LG Samsung Whirlpool
Double Door Single Door
Price Comparision of Refrigerators
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5000
10000
15000
20000
25000
LG Samsung Whirlpool LG Samsung Whirlpool
Semi Automatic Fully Automatic
Price Comparision of Washing Machines
Retail prices at the national level.
SOME KEY FINDINGS IN THE CHANNEL
Demurrage costs Tight control over inventory management. Goods ordered by the dealer or the distributor
must be claimed and stored by them in their inventory. In the event of ordered goods remaining unclaimed, the company has the right to penalise the
distributor or the dealer, as the company has to arrange for extra space through third parties. These costs are to be borne by the dealer or the distributor (in addition to heavy penalties) –
known as demurrage costs.
Trade off between extra goods on display and risk of inventory clearance Based on speculation and consumer trends in buying, dealer may order extra goods. Placement of new goods in strategic places by the dealer (again, based on speculation and
observed consumer habits.) Risk of penalties due to inventory hold-up, against the profit garnered from selling new
goods (say, a newly introduced hot-selling product at that time,) faster based on dealer’s ideas and speculations.
Every square inch of the store has a cost and penalty associated with it.
F8
ZERO CREDIT policy followed by company when dealing with distributors and dealers.However, the distributor may allow for a credit period of 7 days, depending on the health of the retailer’s balance sheet.
SOME KEY FINDINGS IN THE CHANNEL
OFFERS like goods free with other goods are almost always given by retailers to push sales during festive seasons. Company does rarely gives such offers. Company’s promotions may be through scratch cards, free trips and/or microwave cooking kits etc. Explicit offers are generally made by the retailers.
BIDDING SYSTEM is used by the company to select dealers. Strength of the balance sheet and the reputation of the dealer is looked at before authorizing the dealer.
INCENTIVES to the distribution channel are through certificates of recognition.
F8
“Har area main sirf ek hi distributor ho sakta hai, aur is area ki distributor main hoon” *
*Slightly adapted from Shah Rukh Khan’s dialogue in Chak De India. *We don’t endorse smoking
MARGINS IN THE CHANNEL*
KEY FIGURES AT SPECTRA ET (DEALER)
• At any point in time, the inventory at SPECTRA ET is valued at 2.5 crores.
• The inventory clearance period is 60 days (approx.)
• The annual sales revenue is 30 crores INR*.
• Annual operating expenditures of 66 lac INR* is recorded.
• Margins offered by the company to the retailer, and the retailer to the consumer is 4 percent and 10 percent, respectively.
*The figures stated above may or may not be inflated, based on the manager’s tolerance level.
F8
StrengthsNo middle men, so higher margins for company, retailers.
Company has higher control over the retail; better consumer information.
Well experienced retailers with decades of experience
OpportunitiesThe experience and insight of retailers can be used to
sell products better.
Company can utilize the channel for delivering better service.
Better sales as sales people trained directly by company
WeaknessCompany needs to micromanage. Drain on resources.
Risk is borne by company till the product reaches the retailer.
ThreatsOnline stores eliminate the retailers. So better price to
consumers.
Also, retailers can think of using the online channel. *We suggested this to the Spectra ET manager, who looked
bemused at the idea*
SWOT Analysis
SWATTING THE SWOTF8
Visit to the Stores
**Notwithstanding the fact, the pic would be used in a presentation.
The store manager is tired of your questions by now.No comments.
Happy families start at Samsung
AND SAYS, THANK YOU!